READ: Commentary: China's tech firms were supposed to help achieve the Chinese Dream E-commerce gross merchandise value grew 23 per cent per year from 2018 to 2020, faster than the compounded annual growth rate of China’s, India’s, and the United States’ GMV during the same period, according to Bain. Southeast Asia’s online retail market now accounts for 5 per cent of its total, but it’s on a rapid tear. Yet what is more remarkable is how many of these new big techs have demonstrated an ability to perform well in many of the disparate markets in Southeast Asia, in a way that creates a natural barrier to entry to other new challengers. Sometimes, there is market dominance in certain countries and sectors, as homegrown players like Gojek may achieve in Indonesia. Of course, the markets in Southeast Asia can be very different. Shopee was the third most downloaded app globally in the shopping category in 2020. Grab, Gojek, SEA Group (Shopee) and Lazada are all plugging into this trend with ride hailing, online shopping and delivery and increasingly getting into other areas like banking and insurance. 40 million people in the region came online for the first time last year. To put that in context, these 310 million digital consumers represent about half of Southeast Asia’s population. It reached that number last year, five years early. Bain and Co previously forecast that the number of digital consumers in Southeast Asia would reach 310 million by 2025. Looking just at Indonesia, the median age is 30.2 years old.ĭigital consumption, or those purchasing a product or service online, is growing rapidly.
It’s half that of China, but consumers are digital natives and young. With a population nearing 700 million, the size of the market is massive. That comes as little surprise in some ways. But attention is now turning to Southeast Asia in a big way. The depth and sophistication of the US market is still unrivalled, despite the rise of its Shanghai equivalent.
Not too long ago, American investors were clamouring to get their hands on anything to do with China and Chinese companies were flocking to US equity markets to capitalise on the enthusiasm. The fact that Grab’s acquirer, Altimeter, has pledged a three year lock up on its shares also shows a healthy dollop of confidence. READ: Commentary: Why Grab is in such a rush to get listed “I don’t like the price right now, but if you wait for some weakness … you’ve got my permission to do some buying,” he said last week. Jim Cramer, the host of the famous CNBC show, Mad Money, cast a strong dose of caution on SPACs and investments in tech companies often.
Though it is worth noting that the valuations are eye-popping and the questions are increasing about the viability of SPACs. The ride hailing-to-food delivery giant is a dominant force and a household name in Southeast Asia. The listing values Grab at US$40 billion. SINGAPORE: If everything goes to plan, Grab will soon raise around US$4 billion in financing in the biggest ever SPAC (Special Purpose Acquisition Company) listing, giving Anthony Tan, the company’s founder, a place in the history books, just as he wanted.
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